Chelsea FC effectively controlled by the British government after it targets Abramovich

UK sanctions on Chelsea owner Roman Abramovich effectively puts the football club under the control of the British government.

Fri, 11 Mar, 2022 - 15:52

William James

Anyone interested in buying Chelsea Football Club can make a proposal to the British government, the UK has said, after ministers sanctioned owner Roman Abramovich and halted his planned sale of the Premier League side.

The British government, which has been under pressure to ramp up sanctions on Russian oligarchs after Moscow's invasion of Ukraine, imposed a travel ban and froze Mr Abramovich's assets earlier this week.

The announcement brought to a halt his recently announced plans to sell the London club, which he had expected to fetch more than £3bn (€3.6bn). The club is now effectively controlled by the UK government.

"As the licence conditions are written today, the sale would not be allowed," Britain's technology minister Chris Philp told Sky News.

"However, if a buyer emerged it would be open to that buyer or to that football club to approach the government and ask for the conditions to be varied in a way that allows that sale to take place.

Ownership

British property developer Nick Candy remains interested in making a bid, a spokesperson said, and was examining the details of the sanctions announcement. Chelsea has said it would seek changes to the licence under which it must now operate to allow the club to continue as normal as possible. The UK government has said that while Mr Abramovich cannot benefit financially from the club, some changes might be possible.

Separately, London-listed Russian steelmaker Evraz, in which Mr Abramovich is the largest shareholder with a 28.6% stake, said on Friday that 10 of its 11 board members had quit. While Chelsea's main shirt sponsor, mobile network Three, has suspended ties, another sponsor, Trivago, said it was looking forward to the change in ownership as soon as possible.

"The uncertainty over the current ownership situation of Chelsea FC has been challenging. Moving forward, it is important to us to continue supporting the club," the internet hotel search firm said. Three said earlier this week it had asked the club to remove its logo and was suspending its relationship, while shirt sleeve sponsor Hyundai said it was considering its next move.

Canada also imposed sanctions on five Russian individuals including Mr Abramovich and is barring 32 Russian companies and government entities from receiving defence equipment or supplies from Canada, Prime Minister Justin Trudeau said in Warsaw on Friday. The Canadian operations of Russian steelmaker Evraz, of which Mr Abramovich is the largest shareholder, will not be affected by the move, Mr Trudeau said at a news conference.

Mr Trudeau said,

"The sanctions on Russian officials and oligarchs like Abramovich are directed at them so that they cannot profit or benefit from economic activities in Canada or the hard work of Canadians working in companies that they have investments in."

Shannon Smelter

Separately, the outlook for Rusal Aughinish Alumina, and the up to 500 jobs employed at the smelter in the Shannon Estuary in Co Limerick remain clouded.

Rusal is part of the EN+ Group which in turn the Russian billionaire Oleg Deripaska holds a stake. The British government on Thursday included Mr Deripaska on its sanctions list. EN+ and Rusal had told the stock exchange in London that the sanctioning doesn't apply to the group.

"Following [Thursday's] announcements by the UK government, EN+ and UC Rusal confirm that the announcement has no impact on the group or its subsidiaries, and they remain free from sanctions worldwide," it said in a statemant.

"Mr Deripaska surrendered majority ownership and control of the group as part of an agreement with the US Treasury Office of Foreign Asset Control in 2019. The robust corporate governance and ownership changes that were put in place in that landmark agreement remain effective and ongoing," it said.